D.C. Office of Planning Reveals "IZ XL" Program for More Inclusionary Housing Opportunities

The District of Columbia Office of Planning (OP) recently issued a status report in response to a request by the Zoning Commission (Commission) to review the existing Inclusionary Zoning (IZ) program and provide recommendations to create additional affordable housing opportunities in the District. The program, which is being referred to as "IZ XL," was presented to the Commission during its public meeting on Dec. 17, 2020.

OP generally recommends that the Commission adopt a progressive approach that proceeds with phased amendments to the IZ regulations. The first phase of changes would: 1) make IZ applicable to certain areas within historic districts and to conversions from nonresidential to residential, and 2) update the required IZ set-aside relative to construction type. OP will simultaneously research potential avenues to make IZ applicable to the D zones, but is proceeding with due caution given their complexity and history.

Historic Districts

At the time of the adoption of the IZ program, the following historic districts were exempted from the IZ requirement:

• R-3 in the Anacostia Historic District
• MU-13 in the Georgetown Historic District
• NC-6 in the Capitol Hill Historic District

However, an IZ XL text amendment would make the IZ program apply to these zones. In its report, OP suggested that buildings can be designed to remain compatible with the historic district and issues with historic scale and character would be resolved through the design process. Development in these areas would continue to be subject to the requirements of the Historic Landmark and Historic District Protection Act of 1978 (D.C. Law 2-144) and reviews by the Historic Preservation Review Board.

Nonresidential to Residential Conversions

Currently, nonresidential buildings converted to residential buildings with 10 or more dwelling units are exempt from the IZ program if there is no new gross floor area proposed beyond what already exists. The underlying policy for this exemption was to avoid discouraging the conversion of an office building to residential use because many office buildings were already built to their maximum building envelope at the time the IZ program was adopted.

However, OP believes that market dynamics have evolved. An impending text amendment will aim to capture more IZ opportunities when there is a nonresidential to residential conversion. OP intends to further investigate how IZ should be applied to buildings that can be expanded versus buildings that would likely entail demolition.

Set-Aside Requirements and Construction Type

The existing IZ program has two different set-aside requirements to account for the type and cost of construction. Since the adoption of the IZ program, changes in building code and technology are allowing stick-built construction to achieve a height of 85 feet; but the current set-aside requirement for stick-built buildings only captures buildings up to feet. Accordingly, OP has indicated that it will develop a text amendment to increase the zoning height limit threshold from 50 feet to 85 feet as it relates to the type of construction and the corresponding set-aside requirement.

Currently Exempt D Zones

Almost all Downtown (D) zones are currently not subject to the IZ requirements (ZC Case No. 04-33) because there was no bonus density to balance the affordability requirements due to the Height of Buildings Act of 1910. Recent updates to the Comprehensive Plan urge the expansion of affordable units, particularly in the Central Washington Area – the heart of the city. OP is continuing its analysis of the potential to apply IZ in the D zones, and is evaluating the following options:

• phasing IZ requirements over a several year period
• mapping of housing requirements and use of Housing Credits (1958 Combined Lot) to tie the land values of residential and commercial uses together
• allocating housing credits/Transfer of Development Rights (TDRs) to incentivize early adopters of the IZ requirements
• calibrating the percentage requirements

IZ XL Forecast

OP anticipates that it will bring these various IZ XL cases before the Commission for set down per the following timeline:

• Historic Districts – January 2021
• Set-Aside Requirement and Construction Type – January 2021
• Nonresidential to Residential Conversions – February 2021
• Exempt D Zones – April-May 2021

If you would like assistance preparing comments when a Notice of Proposed Rulemaking (NOPR) is issued for an IZ XL text amendment, or if you have any questions regarding the various IZ XL proposals, please contact the authors or a member of Holland & Knight's Mid-Atlantic Land Use Team.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.